business model Posts

What is the outlook for this largest-ever merger of tech companies, assuming that it goes through without any major hitches? The history of prior mega-mergers tell a mixed story. What is there about this one, between two ailing giants, that could be different?

In selling to business customers virtually every SaaS/XaaS company claims to be pursuing a land and expand strategy, to make their subscription and/or consumption business model generate the growth and profits that their investors and executives are expecting. Some companies are already demonstrating emerging best practices in this area though most startups and fast-growing companies still struggle to make their “strategy” pay off. Why is it such a struggle, and what can they do to crack the code?

Why have companies like Apple, Google, Amazon, Microsoft, IBM, Cisco, Oracle, SAP, Salesforce.com, or VMware been so envied by competitors and partners over the years? And how have they come to command the lion’s share of customers’ business in their main categories? Part of the answer lies in their pursuit of Power balanced with a suitable focus on Performance, the essential corollary to Power as a lever for sustained success. In essence, companies like these have built a powerful franchise in at least one major product category where they dominate, which gives them “gorilla” power. Most companies can only dream of this type of success, largely because most entrepreneurs, CEOs, and management teams find themselves over-stretched by the demands of Performance – managing existing commitments – and thus unable to play for Power. Applying just one of these two levers is not sufficient – it is critical to play for both. Whenever companies neglect one over the other, they are quickly penalized by customers, investors, and/or partners, as we’ll see in this post.